What is a Good Credit Score?

When you're thinking about getting car finance, knowing what a good credit score looks like can really help.

A good score doesn't just boost your chances of getting the thumbs up for finance; it can also lead to better deals.

In this guide, we're going to break down how credit scores work, what affects them, and what counts as a good score.

So, if you're on a mission to improve your score or just curious about where you stand on the financial leaderboard, stick around.

Got a specific question? Why not jump to:

What is a “good” credit score?

What counts as a "good" score can change depending on who you're asking. 

Each credit reference agency has its own rule book for what makes a score "good".

Here’s a quick look at what a good credit score looks like according to the different credit agencies in the UK:



  • Excellent - 811-1,000
  • Very Good - 671-810
  • Good - 531-670


  • Good - 881-960
  • Fair - 721-880


  • Excellent - 628-710
  • Good - 604-627
  • Fair - 566-603

How is a credit score calculated?

Your credit score is calculated based on the information in your credit report and the details you provide when making a finance application.

Different lenders have different formulas for calculating your score, so the number can change from one to the next, however they tend to use the same factors to work out your score.

Let's unpack the key ingredients that lenders use to calculate your credit score:

Payment history

How well you've kept up with paying off your loans and bills is a major factor in your credit score.

If you’ve been paying on time, it’s going to have a positive impact on your score. Slipping up with late or missed payments on the other hand will reduce it.

Credit utilisation

Think of this as how much of your available credit you're actually using. Lenders like to see that you're not maxing out every credit card and loan you have regularly each month.

Keeping your credit use low shows you're managing your finances wisely.

Length of credit history

The longer your credit history, the better. A lengthy credit history gives lenders a long look back at how you handle credit, suggesting you know how to manage credit.

Types of credit

Showing you can juggle different types of credit like loans, credit cards, and mortgages, can really help to boost your score.

Recent credit inquiries

Each time you apply for new credit, a 'hard check pops up, which can cause your score to dip. But don't sweat it too much; it's usually just a temporary blip that won’t take long to fix. Multiple ‘hard checks’ within a short space of time can be a red flag to lenders so it’s worth spacing these out to ensure they don’t impact your score.

How can I check my credit score?

If you’re ready to see where you stand, you can check your credit score on the websites of the big three credit reference agencies.

You can also access it using handy apps and websites that offer credit score checks, like ClearScore and CreditKarma.

These tools not only let you see your score but often offer insights into how to improve it.

Monitoring your credit score keeps you in the loop on where you stand and helps you plan your car finance application with confidence.

What are the benefits of a good credit score?

A good credit score doesn’t just give you the green light on loans and credit cards. It also helps you get the best rates and terms out there.

With a good score, you could see lower interest rates and qualify for bigger loans.
But the perks don't stop at borrowing - a good score can even get you better insurance premiums and boost your chances in the rental market.

Essentially, a good credit score positions you firmly in the driver's seat of your finances.

More credit guides

How can I improve my credit score?

Patience is key here, as building a better score can take time. 

Start by making sure you aren’t missing any payments and try to keep your credit card balances low.

Think twice before opening new accounts as too many applications can make lenders nervous about your current finances. 

Regularly scanning your credit report for any mistakes and setting them straight is another smart move. 

Each step towards improving your credit score is a step towards unlocking better finance options down the road. 

For more detailed strategies, be sure to check out our dedicated guide on improving your credit score.

What could damage my credit score?

Knowing the dos for boosting your credit score is great, but being aware of the don'ts is just as crucial.

Let's walk through the common slip-ups that could put a dent in your credit score:

Late or missed payments

Letting payments on credit cards, loans, or even those utility bills slip through the cracks can leave a mark on your score.

High credit utilisation

Maxing out your credit is a warning sign for lenders. Aim to keep your credit use under 30% of your total limit to stay in the safe zone.

Applying for too much new credit

Every credit application can trigger a hard search, temporarily impacting your score. 
Too many applications are a red flag too, showing you may be overly reliant on credit.

Having only new credit accounts

A credit history full of brand-new accounts doesn't give lenders any idea of how you handle debt.

A mix of old and new accounts on the other hand shows you're used to managing credit commitments.

Errors on your credit report

Watch out for errors, like wrong account details, on your credit report. 
These mistakes can unfairly drag your score down, so keep an eye on your report and clean up any inaccuracies.

Defaulting on accounts

Defaults can have a major impact on your credit score, and they stay on your report for up to six years. Avoid falling behind on your repayments to avoid a default.

Steering clear of these pitfalls can help safeguard your credit score, setting you up for a smoother financial ride.

Here at Carmoola, we consider credit scores of all shapes and sizes when reviewing car loan applications.

But remember, your score influences both the amount we can lend, and the APR attached to your loan.

FAQs About Credit Scores:

Is a credit score of 400 good in the UK?

In the UK, a credit score of 400 is generally considered below average, depending on the credit reference agency's scale. For instance, with Experian and Equifax, this score would typically be in the lower range. It suggests that there may be areas in your finances that could be improved to make you more appealing to lenders.

What is the most common credit score used in the UK?

There isn't a single 'most common' credit score, as lenders use different credit reference agencies. The three main agencies are Experian, Equifax, and TransUnion, each with its own scoring system. Lenders might use one or a combination of these scores to assess credit applications.

Why does my credit score differ across reports?

Your credit score may differ across different reports because each credit reference agency has its own method for calculating credit scores. They may consider your financial behaviours differently, and the information they have access to, can vary slightly. Also, not all creditors report to all three agencies. This can lead to variations in your reported credit history and consequently, your credit score.